Best Practices for Surveillance, Monitoring and Incentives In Contract Administration

Acquisitions is an extremely complex area of government. The regulations that dictate acquisitions requirements, FAR, is well over 1,000 pages of regulations. The pure length of this document is impressive, equally impressive is the complexity of FAR. Understanding how FAR operates and impacts the acquisition process is one of the many challenges facing acquisition professionals.

Navigating FAR is a challenge – one that I am sure many acquisitions professionals can relate too. With that being said, there are many other challenges facing acquisitions professionals. The upside to all these challenges is that the web is flooded with a lot of great resources for acquisition professionals.

I recently spent some time on acquisition.gov and found a long listing of best practices for contract administration. I thought I would share some of the best practices, and then look to the community for some of your insights. What was interesting was that acquisition.gov broke out of concerns and then described some best practices, I’ve structured them in a similar fashion here.

Inadequate Surveillance and Monitoring of Contracts

I can imagine that this must be an enormous challenge for contract officers. With the complexity of each contract and many moving parts, having the right measures in place to monitor a contract is critical. By having a plan and policy in place, time and resources will be saved. The best practices recommended here were:

  • Develop a contract administration plan
  • Specify the outputs of the statement of work are
  • Describe the methodology to conduct inspections.

The best practices section also recommends the following:

The contract administration plan should contain a quality assurance (QA) surveillance plan as a subpart. Development of a plan is important since it provides a systematic structured method for the COTR to evaluate services and products that contractors are required to furnish. The QA plan should focus on the quality of the product delivered by the contractor and not on the steps taken or procedures used to provide that product. It includes appropriate use of pre-planned inspections, validation of complaints and random unscheduled inspections.

Lack of Incentives

The second section I wanted to share was how to manage a lack of incentives in a contact. This section recommended considering to provide incentives to the COTR based on a variety of criteria. Some examples are:

  • Amount of savings achieved
  • Quality
  • Timeliness
  • Minimum Technical Contract Changes
  • Customer Satisfaction
  • Contract administration tied to performance evaluation
  • Promote success

To see a full listing of best practices, check out acquisition central.

What are some of your insights? What mechanisms do you have in place for surveillance and monitoring? What kinds of incentives have you used and how are the negotiated into the contract?

This post is brought to you by the GovLoop Acquisition Council. The mission of this council is to provide you with information and resources to help improve government. Visit the GovLoop Acquisition Council to learn more.

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Peter G. Tuttle

Here’s one for you, Pat. Don’t offload the surveillance/oversight activities that should be performed by a Program Office or COR to a contractor. The more removed and/or disconnected the Government customer gets from determining that they are actually getting the supplies/services that they are paying for, the more problems they will have. Cheers. Pete

Jaime Gracia

The lack of formal COR programs is pervasive across government, and one of the fundamental weaknesses of contract administration.

Most best practices I have seen, which includes acquisition.gov, provide great resources and lessons learned for effective contract management. However, the federal culture of the acquisiton function is simple throughput; get contract actions (e.g. procurement packages) off one’s desk, with little regards to what happens afterwards.

There is little focus on post-contract award, with the end result of rampant waste, fraud, and abuse. Establishing formal COR programs that are seen as mission critical functions (and thus including they get fully funded), will include getting the right skill set of personnel, training them, and finally holding them accountable for results will help alleviate this problem.

Jo Youngblood

There needs to be a clearly spelled out chain of command and prescribed set of minimum actions at each level of reporting when a contract does go wrong – because contracts do go wrong.

Steven Ollek

Another great resource is to utilize a Contract Administration Office (CAO). I work for the Defense Contract Management Agency (DCMA), which is the recognized CAO in the FAR (FAR 42.201). In addition, a listing of our assigned CAO responsibilities can be found in FAR 42.302. We support primarily DoD organizations, but also support non-DoD org’s such as NASA, Department of Homeland Security, etc. Our Agency is a valuable resource for providing the in-plant technical surveillance, as well as post-award contract administration with progress payments, contract modifications, etc. If you would like more information, I am more than happy to help!